What Is GST?
Goods and Services Tax (GST) also known as Value-Added Tax (VAT) is the consumption tax levied on goods and services. In Singapore, the rate for GST is currently at 8%. However, not all businesses are required to register for GST and there are GST exemptions available for certain industries.
If you want to check if your company can be exempted from GST due to your industry, refer to this table by IRAS. It shows the most updated information on what kind of taxable and non-taxable goods and services are subjected to exemption from GST.
Not all businesses are required to register for GST, it is only compulsory should the business exceed S$1 million in taxable turnover. Businesses can apply for exemption of GST if most of their goods or services are exported or supplied internationally also known as “Zero-Rated Supplies”. Businesses that do not meet the criteria can also choose to register for GST under voluntary registration. However, it is important to note that upon approval of GST, the business has to be registered for at least 2 years regardless of the business turnover.
Upon successful registration of GST, the business must charge GST on their supplies and also indicate GST on the invoices that are given to customers. The GST collected from sales is known as the output tax. Based on the business GST period, the output tax is collected and paid to IRAS at the end of the GST period which is usually every quarter.
Also, businesses can claim back GST incurred on business purchases and expenses; this is submitted together at the end of the GST period together with the sales listing as the input tax. However, registering for GST will require additional efforts on administrative work to submit the GST listing every quarter or whichever duration you are liable for GST Form 5 submission.
Most companies will contract a company service provider in order to calculate or register for GST exemption. WLP group offers both GST Registration and GST Computation & Submission to help you better manage your financial accounts. Contact us today to set up a free consultation on how we can help you.
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